Well, once again the dreaded Tax Day has come again in the United States. As millions scramble to finish their returns at the last minute, and millions more are reminded for a moment about how painful, frustrating, and stupidly complicated this year’s taxes were, perhaps you will give me a moment to indulge a fantasy:

Imagine there’s no 1040
It’s easy if you try
No capital gains tax
Eating away our pie
Imagine all the people
Keeping all their pay…

Imagine there’s no AMT
It isn’t hard to do
Nothing to evade or cheat for
And no Schedule-C too
Imagine all the people
Earning cash in peace…

You may say I’m a dreamer
But we’re growing every day
I hope someday you’ll join us
And the world will keep its pay!

(With no apologies to Lennon, that socialist twit.)

While many taxpayers are lucky enough to use 1040-EZ (as long as they don’t mind missing out on half the deductions allowed), anyone who has ever: bought a house, received any money for contract work, sold any stock, earned any sizable amount of interest, earned any dividends, used a car or possession for business, or done any of a hundred other fairly common things knows the joy of the full 1040. And that’s a joy that they get to enjoy for a longer time each year, as the code grows in complexity.

This year, in fact, we were treated to the wonderful spectacle of a recursive function in the capital gains worksheet: Box 22 depended upon Box 10, Box 10 depended upon Box 37, and Box 37 (naturally) depended upon Box 22. A literal Catch-22 right there in the 1040! So what did the taxpayer do: why fill out boxes in order over and over again until the numbers stopped changing. Yes, this year’s tax form required iterating over a recursive function. It’s official: advanced mathematics is now required to accurately fill out an American tax form. I guess we should just be thankful the function converges…this time.

So, enough whining. What should we do?

Scrap the damn tax code!

No band-aids, no simple patches like the mid-80s reforms, no more kicking the problem out for another decade or so. Scrap the cobbled together, rickety, ideologically-driven, overly-intrusive, economically regressive thing, and start again.

But what to replace it with? The Flat Tax? The Fair Tax? The As Yet Unknown Tax? No Federal Tax? (That last one’s for states rights fanatics like Angry Midwesterner.) Before I try to lay out a positive, let me shoot down some perennial red herrings:

We can’t have a [flat/Fair/no] tax – it’s regressive!
Now this objection can have a reasonable meaning, which is: the very poor must use the vast bulk of their money for necessities, and the very rich use almost none, so a tax code should respect that each tax dollar is a greater burden on the poor than the rich. And that reasonable objection has a simple and reasonable answer: set a personal deduction large enough to ensure that the poor pay little or no tax.

Sadly, most fans of “progressive” taxes don’t give a damn about the poor—they’re besotted by the sin of envy and want to soak the rich and damn the cost! For these folks, the answer above is worthless because it only benefits the poor, it doesn’t punish those evil, evil rich. You’ll pardon me if I see no reason to respect the wishes of a bunch of folks eager to punish the deadly sin they hate (greed) by enshrining the one they love (envy) in law.

Any tax code we come up with will just get hijacked again—and be just as complicated soon!
This is actually very reasonable, and a useful cautionary warning. But as an objection to doing something it’s pretty wrongheaded. Just because every system can be abused doesn’t mean that some aren’t better than others. Given that the current code kills a sizable forest every time they need to print a hard copy of it, I find it very hard to believe that much simpler systems will somehow be easier to corrupt.

Now is not the time for radical reform—we have massive deficits and are in a recession!
No, now is exactly the time for change, especially if those things are true. Taxes are, almost always, regressive economically: the more taxes the less growth and the greater the chance of recession. Lower taxes, and you spur growth. Ah, but simplify taxes, and you reduce the burden of complying ($200-$500 billion dollars annually), which lowers the effective tax burden (taxes plus fees to file taxes). So a simpler system would spur growth even without lowering taxes. Anyone who’s run their own business, done contract work on the side realizes this. The current system burdens the self-employed with significant costs.

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So, away with these objections, and on to the glorious future!

Well, actually, I don’t have a nicely laid out, detailed plan for tax reform any more than anyone else does. But, to avoid the label of coward, I’m willing to stick out my neck and recommend a general outline of one. First the general principles: the poor should not pay tax (they’re poor), those who work should not be punished (they’re industrious), those who invest should not be punished (they generate capital), those who start businesses should not be punished (they are the engine of growth).

So, the plan:

  1. A flat income tax of 25% Easy to calculate, easy to file.
  2. A standard personal deductible of $20,000 per adult and $5K per child. Make less than that? No tax for you. Creates these effective tax rates:
    Effective Rate by Income
      $20K $35K $50K $100K $250K $1 million
    Single 0% 11% 15% 20% 23% 24.5%
    Single Parent (2 children) 0% 3.5% 10% 17.5% 22% 24.25%
    Family (2 children) 0% 0% 0% 12.5% 20% 23.75%

    Progressive!

  3. No capital gains tax. (That’s right: 0%! Don’t whine too much though, lefties, look on down the page.
  4. No tax on interest or dividends. (That’s right: 0% But wait, progressives, you’ll get your day!)
  5. No corporate taxes. (That’s right: 0% here too! Think about it: corporations don’t pay taxes, they just pass those taxes on to shareholders, customers, or employees. If they simply avoid taxes through clever bookkeeping. Breathe steadily, lefties, good news follows!)
  6. Earned Income Tax Credit: reward the working poor who are stuck, for the moment, with low-paying jobs. Exact mechanic to be worked out, but we should be generous while always making it more profitable to take a better job!
  7. Nothing else. No other deductions. No tax loopholes. No tax shelters. No tax-free trusts. No mortgage deductions. You get a personal deduction, you pay 25% on what’s above it. That’s it.

Now, before I’m hauled outside, doused in environmentally friendly fair-trade organic vegetable oil, and set alight, let me point out why this is a win for the soak the rich crowd:

Who pays taxes in America? Despite campaign rhetoric, it ain’t the poor. In fact, it’s the rich. The top 10% of income earners (those making $103K and up) control around 46% of the wealth but pay over 70% of the taxes! This means, of course, that most of those nice deductions, exclusions, etc. benefit the wealthy. A 25% rate might seem like a tax break, since the current top rates range from 28% ($77K-$160K) to 35% (above $350K), but those rates on on taxable income—after deductions have had their day. A 25% rate on all income above $20K should compare pretty favorably to 28% on income left over after well above $20K in deductions have been applied.

So why would the rich approve? Because a flat tax allows them to calculate their burden easily, estimate the economic costs of various options easily, avoid expensive tax preparation and record-keeping, and eliminate the expensive audits or penalties which arise from the inevitable mistakes in the current ridiculously complicated tax environment.

And, best of all, eliminating compliance costs and flattening rates will spur an economic boom. Wealth, individual income, and tax revenues will rise, and the tax base will grow as new workers enter the pool.

My numbers are rough, and doubtless need fine-tuning. We’ll need a bunch of work to get things right, and we’ll have to work across the political divide to get a tax code that rewards hard work and investment without unfairly hurting hard-working blue-collar folks. But we can do it! We can revolt against this bloated tax code shoved upon us by a political class of lawyers and lobbyists and return to something simple and sensible. Fourteen states have done it, seventeen nations have done it, and we can do it too!

You may say I’m a dreamer
But we’re growing every day
I hope someday you’ll join us
And the world will keep its pay!

First, review this fine cautionary tale available here, courtesy of the ACLU:

http://www.youtube.com/watch?v=RNJl9EEcsoE

Now, I am no great fan of the ACLU, but credit where credit is due, this piece sums up the dangers of all those clever national IDs, government administered programs, linked databases, and GPS-enabled devices nicely. In fact, just two short years later, much of what is portrayed already exists:

  • businesses use caller-ID to recognize phones and link to customer information
  • even if the government didn’t give it out, businesses would certainly use a national ID number as a key—just as they use the SSN currently
  • your home address, birthday, name, etc. are all already keyed to the current equivalent of a national ID—your SSN
  • where you work is almost certainly on file—didn’t they ask the last time you applied for credit or a loan?
  • cell phones with GPS currently do broadcast your location to services that request that information—unless you configure them not to
  • businesses already assign delivery areas or prices by risk of the neighborhood—as those living near shady areas know—and as crime stats become more instantly available, this can only increase
  • as businesses partner to offer shared customer incentives, exchanging information about recent purchases and coupon offers is becoming commonplace
  • certainly whether your cards are maxed out is easy—a quick query to each card could do that

And some things, which have not yet come to pass (as it were) are terrifyingly likely:

  • currently legislation protects your health care information, but either government-run healthcare or single-payer schemes would require releasing it to the government at the least
  • legislation to allow the government to regulate food and lifestyle choices for health is already proposed—once the government’s actually paying for health-care, what will happen
  • currently the health-care industry and insurance industry would love to be notified about people’s purchases and force them to sign waivers—unlike them, government can actually enforce such desires
  • in our climate of constant fear of terror attacks, does opening travel itineraries to public scrutiny seem farfetched?

Horrifyingly, the only thing which seemed utterly ridiculous was libraries ever voluntarily making your reading choices public. But amazon.com on the other hand…

Clearly some of what is portrayed is fine, even useful, but some is frighteningly Orwellian.

So where should the line be drawn? Where does the scenario presented cross the line from convenience to surveillance? As technology advances it seems increasingly impossible to effectively compartmentalize information, so should we assume that whatever the government knows about us will find its way into private hands? And just how much should the government know about us, anyway?

Discuss amongst yourselves!

It’s official: there’s a health care crisis in America. When all of the major candidates for President spend time talking about it, you know some solution is just around the corner. But, tragically, most of the common wisdom on what the problem actually is and how to fix it is 180° off course.

To understand that this true, why this is true, and how we came to be here, we first need to make a critical—but often forgotten—distinction:

What we care about is access to health care, not access to health insurance.

We shouldn’t give two cents about access to health insurance, except as a means to health care. Listen carefully to what all the politicians actually say: nearly all of the verbiage about universal coverage, universal access, etc. is focused on access to health insurance. Why? Because that’s something that government can actually promise, unlike access to health care. Short of enslaving all doctors, chaining them to desks, and scientifically distributing them around the country, there’s simply no way to ensure universal access to health care.

If you live in the middle of nowhere, for example, all the health insurance in the world does you no good if there aren’t any doctors for 500 miles. This is a problem in a surprising number of areas. In some regions the only neurosurgeons (for example) may be in large cities. The high cost of medical malpractice insurance has combined with natural market forces to increasingly limit specialists to lucrative big city markets. A growing problem in an age of increasingly effective but highly specialized medicine.

Or again, if the government’s brilliant solution to your lack of access to life-saving medicine reduces the available providers by capping what they can earn without capping their expenses (such as the aforementioned malpractice insurance), how exactly will that help you? What good does it do you to have every right to have some procedure only to find that no doctor is willing to perform it?

Or consider the dilemma for many in Canada. There, you have not only universal coverage, but the “right” to free comprehensive care. Unfortunately, you have no right to decide just what “comprehensive care” might be for any given condition. So, in some cases, you will be told to take some pain killers, shut up, and wait to die. In others, your operation may be scheduled in weeks to months due to shortages of facilities or personnel. All the problems, in short, of the worst possible HMO with absolutely no independent legal recourse.

The sad truth is that universal health insurance coverage will not solve our problems. Nearly universal health insurance coverage already exists in our system. (In fact, it’s part of the problem.) Out of 300+ million people in the United States, under 30 million citizens lack health insurance. That’s a 90%+ coverage rate, but somehow I suspect we don’t have anything like a 90% satisfaction rate with health care. In part because all of that health insurance actually makes decently priced quality health care harder to get. If you ever want to verify that for yourself, shop around for doctors offering to pay in cash, off the system. You’ll be surprised at the deals you’ll find, especially for routine things like office visits—which account for the bulk of most people’s health needs.

If we’re really serious about providing quality health care to as many people as possible, for the best possible price, we need to leave aside the rhetoric and actually look seriously at the real problems. So I propose to do just that over the next few weeks, examining the problems of consumer health insurance, high drug costs, malpractice insurance, and health care for the poorest Americans. If you’ll join me, I think you’ll be surprised at some of what you find, and I hope you’ll come to agree with me that our focus needs to shift to what really matters: the best health care possible for the most people at a reasonable cost.

Once upon a time, news trickled out into newspapers or magazines. Then radio brought news bulletins out on a twice or three-times daily schedule. Television merged the fast pace of radio with the graphic content of photographs but didn’t really accelerate things further. Over many years we doubled or tripled our daily dose, but that was about it.

Until cable. With the advent of CNN and Headline News, and all their successors we now had news on an hourly basis. Naturally the Internet would only take that further, with news now literally “on demand.”

So it was only a matter of time until some clever news agency merged various technologies to give us this: a fully embedded, Google map-based, interactive display of currently known hash houses in Florida:

http://www.miaminewtimes.com/php/specialreports/index.php?report_id=791046

Can a full merge of all this with Google Earth be far behind? Will we soon have “breaking news” layers for Google Earth allowing us to zoom in as events unfold? Will Google eventually stream live satellite coverage to allow us to watch police chases and shootouts in real time?

Is there even any downside? (Well apart from the unfortunate inevitability that some poor sap will have his house displayed for national scorn due to a mistyped address…)

Pretty soon will this scenario be not clever fantasy but simply the way it is?

If so, is that good or bad?

Discuss!

I’d like to kick off a new semi-regular feature here at the Angry Men, a celebration of Americans of all different stripes and backgrounds who have all, in their way, made America and the world a better place. They will be politicians, generals, entrepreneurs, scientists, and inventors; famous, and obscure; figures of history and thoroughly modern folks. But together they will remind us of the diversity and unity of the United States, of our greatest principles and of the great promise of America: you are free to pursue your dreams as best you can.

Without further ado, let’s raise a rousing chorus of Happy Birthday to our inaugural Great American: Walter Elias Disney:

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The first few decades of Walt Disney’s life reads like an almost stereotypical American success story: born the son of an immigrant, growing up across the Midwest in big cities and small towns, sneaking off to World War I as an ambulance driver with the Red Cross, hustling to get started in his chosen career, getting breaks from his brother and returning the favor, and making and losing businesses and fortunes. All by the age of 33.

But in 1934, Disney did something destined to change American entertainment forever, and catapult him to new heights: he produced a full-length animated film featuring both realistic human characters and fantastic cartoon characters. This doesn’t sound like much these days, but back then it was “Disney’s Folly” because it had never been done, and conventional wisdom said it couldn’t be done. Disney bet the farm that conventional wisdom was wrong, and his competitors bet that he’d lose that farm.

Of course, as we know, Disney was right, and Snow White and the Seven Dwarfs was wildly successful, playing to standing ovations and winning an Oscar (well, actually one large and seven small Oscars, in fact). More than a personal triumph, it ushered in the golden age of American animation, and set the stage for the staggering industry of animated features around the world. It also launched Walt Disney Studios in Burbank and bankrolled a skilled studio of master animators. Disney would go on to produce a whole cavalcade of classic animated films: Pinocchio, Fantasia, Dumbo, Bambi, The Adventures of Ichabod and Mr. Toad (which brought the Legend of Sleepy Hollow and the Wind in the Willows to many for the first time), Alice in Wonderland, Peter Pan, Cinderella, and many, many more. Many did not make much money, some were quite successful, but all have endured the test of time surprisingly well and stand as a tribute to Walt Disney’s vision that rich, complex stories could be told through animation.

After the Second World War, Disney brought his vision for a child’s fantasy amusement park to life in Disneyland, setting it on a huge lot and surrounding it by one of his favorite things in the world: a train. Throughout the 1950s Disney Studios worked on Disneyland and released major live-action and animated features. Disney also turned his eyes towards the stars and worked with NASA (and Werner von Braun) to promote space travel through films.

The 1960s saw Disney at the peak of his success, with Mary Poppins sweeping box offices and Disney debuting his vision of the future at the 1964 Worlds Fair. Not content with a one-time display of that vision, he laid the plans for an expanded and enhanced Disneyland known in development as “Disney World” and sited on 27,000 acres in Florida. Although plans included an expanded amusement park (to be known as the “Magic Kingdom”), resorts, and hotels, the centerpiece was to be Disney’s vision of the perfect future community, the Experimental Prototype Community of Tomorrow (EPCOT). In Disney’s expansive vision, EPCOT was to be a working future city, whose residents would focus on innovative science and advanced technology.

Sadly, Walt Disney would never live to see the fulfillment of this vision, as he died from lung cancer in 1966, just two years after beginning the new project. His brother Roy came out of retirement to manage the project (and company) and open the first stage of the new park, now formally called “Walt Disney World Resort” in October 1971. By December of that year, Roy too was dead.

EPCOT as envisioned by Disney never came to be, though the modern Epcot park does provide a showcase for future technologies, and embodies the spirit of international cooperation in its World Showcase. And Disney’s Celebration community, built by Disney Imagineering as a model planned community, comes closer to the original goal of EPCOT (though in a suburban rather than urban mode).

Of course, as we remember the man and his legacy we should not overlook the darker side. Walt Disney never trusted organized labor, and his prejudice led him to make unsubstantiated allegations during the McCarthy hearings of the 1950s. He spied on union activity for the FBI for years and may well have illegally intimidated union activists. He was, as many visionaries are, a notoriously difficult man to work with. In short, he was a man, with a full share of faults and limitations.

But he was also a visionary in the best American mode, with an optimistic and enthusiastic take on society, technology, science, and the future. He built places devoted to bringing joy to children and inspiring them to dream deeply. He gave the world the vast legacy of his dreams in film and concrete and has inspired millions around the world with a vision of pluralism, tolerance, kindness, optimism and joy. For all of these reasons, whatever his human faults and foibles, Walter Elias Disney is, indeed, one of the Best of Us.

UPDATE: Welcome Fark.com! After you read this, feel free to have a look around. You’ve probably already seen this and this, but check out this fine piece about the One Laptop per Child program, this one about that nutcase Chavez, and, of course, this classic challenge.

On Friday, a most remarkable thing happened. “Evel” Knievel, that most American king of daredevils, died. In bed. Of something utterly mundane. After a career of spectacular stunts and even more spectacular failures, injuries, and traumas, Evel’s end might have been that of any elderly American.

But, as the Washington Post writes, however mundane his death, his life remains “larger than life:”

Any time ABC showed a Sunday afternoon Knievel stunt on “Wide World of Sports,” you could expect half the neighborhood to show up in the cul-de-sac immediately afterward, in an act of instant emulation. Someone would get a piece of plywood or a couple of 2-by-4’s and a cinderblock. Everyone had their bikes (bicycles, that is — Huffys, BMXs, with the banana seats and faded Wacky Packages stickers) and would perform jumps. You could get the little kids to lie flat on the asphalt in a row next to the ramp. (I can jump all four of you.) Kids would jump until the wood broke, or, more wonderfully, a daredevil got hurt and ran home bleeding.

In a way, Evel inspired a generation (if not to greatness, at least to extremes). Whether they know it or not, the skateboarders of the 1980s, the Extreme sportsmen of the 1990s, and the “Jackasses” of the 21st Century all owe their debt to Evel Knievel. He moved daredeviltry away from actually succeeding at apparently dangerous tasks to attempting truly, spectacularly dangerous tasks. And because, by sheer force of showmanship, he succeeding in that shift, his failures never really damaged his legend.

Because the story of Evel Knievel isn’t about success, or failure. It’s about daring to do the (sometimes literally) impossible. Defying death, sense, and sometimes even physics to reach for a dream—even if it really can’t be done. If nothing else, Evel taught us that you can defy all the rules and, if not walk away from it, at least be carried off with a thumb held high. In Evel’s stunts, raw courage and optimism were set against brutal reality. And if, brutal reality usually won brutally, you never stopped hoping against hope that this time, just this once, Evel would prevail.

In that, Evel Knievel truly symbolized America, in all her glory and folly. And he symbolized America too in his final embrace of God and Jesus Christ, realizing at last that there are some things man need not face alone. In Evel was played out the longstanding paradox of America: materialistic and faith-driven, huckster and preacher, worldly-wise playboy and humble penitent. In those latter days, no less than before, Evel was quintessentially American.

Requiest in pace, Evel.

So on this day when Angry (and not-so-Angry) Americans of all sorts gather together to share food, family, and thanks, we Angry Men here wish everyone a Happy, Healthy, and Thankful Thanksgiving!

But, never content to simply wish you well, we also want to ask you: What do you give thanks for this year?

Answer however you wish: be partisan or pluralistic, secular or sectarian, serious or frivolous as you choose. Only share with us your thoughts and thanks this season.

To start things out, I’ll share my thanks this year:

  • For living in the greatest nation on earth, where we can all celebrate Thanksgiving in whatever way feels best to us, even if it’s no way at all!
  • For a 2008 Election season which promises to be fun and bloody, if not terribly edifying about the character of many of our leaders.
  • For our troops, especially those in peril abroad, who give us a loyalty and service we frequently don’t deserve as a culture.
  • For all those, throughout the world, who risk life, health, family, and property to oppose injustice, oppression, ignorance, and poverty: from Iraqis trying to rebuild their country in the face of terror and barbarism to Pakistanis trying to find a middle way between military dictatorship and rule by gangs, and everyone in between. May God bless them and their work.
  • For all of you who read our words, whether you agree with them or not, and especially for you who take the time to leave words of your own. Thanks for caring enough to read what we think and share what you think!

The holiday season is always an interesting one for me. In addition to visiting family, in-laws, food, and fun, it’s one of the few times I am exposed to modern television. I’m not normally exposed to television at all (except football on Saturday’s at the bar), as I simply don’t watch it. I also don’t miss it. I find reading articles on the internet, or reading books far more entertaining. The holidays usually serve to remind me why I don’t watch TV, as I am bombarded by the mindless shows, ridiculous commercials, and 24/7 celebrity infotainment. This time around, however, I was exposed to a particularly disgusting modern show, which is so revolting it deserves its own rant.

I’m talking about TLC’s “What Not To Wear“.

I’m not quite sure how a show this awful and vapid managed to work its way onto a network known as “The Learning Channel”, but then again looking at the rest of the lineup, with many “interestingly” named “gems” like:


  • A Makeover Story
  • American Hotrod
  • Little People, Big World

I have to question what people are learning. Just in those three shows, the channel is selling shallow judgmental culture, NASCAR, and “Let’s laugh at the midgets”. Bravo, way to teach people good values and interesting lessons. I can only imagine the depths of tacky tasteless crap that these shows manage to plumb, as “What Not To Wear” dredges up some Grade A Sewage, and masquerades it as entertainment. Not having experienced the other shows on The Loser Channel, I’ll have to focus on “What Not To Wear”, and why shows like this are an affront to America, Freedom, and just plain old good taste and tact.

The premise of “What Not To Wear” is simple, since Rich Northeasterners are Vapid, Shallow and Soulless, they assume this to be the condition of Americans everywhere, and thus appearance is the sole quality by which people should be judged. As such, the show implores its viewers to send in their friends and family to be ridiculed on national television for having tastes which are independent of what Paris Hilton or Tom Cruise are currently wearing. The hosts (both of which are poster children for Coastie Callous Consumerism) then make the participants an offer, they can waste $5,000 on clothes from stores which are paying the show for massive product placement, if they throw all of their current clothes into the trash (and of course buy clothes that the celebrity zombies agree are “in fashion”). This of course leads me to two large questions:


  1. Who needs to spend $5,000 on clothes, especially when we live in a world full of hunger and illiteracy?
  2. If you’re going to toss out someone’s wardrobe, would it kill you to have a heart and donate it to the Salvation Army or Goodwill?

The rest of the show is simply an exercise is tearing down someone’s individuality and rebuilding them as a celebrity zombie, decked out in the latest brands that are paying the show for promotion (with long panning shots over store names), repeat ad nauseum, which doesn’t take long at all. I’m sure with our modern infotainment, celebrity, consumerism obsessed culture that this is but one in a long list of disgusting shallow shows on TV. What bothers me is that this trash is on television in the first place, and what’s more, that a lot of people seem to be watching it.

Personally, if I had $5,000 to give away every episode of a TV show, I can think of millions of better ways to spend it that actually contribute to the world. Like perhaps finding a needy elementary classroom, introducing people to the town and children, and then donating 25 Laptops from the One Laptop per Child project to the class. Or maybe they could have people write in with charities to donate the money too, and spend the episode show casing needy causes. Another great idea would be to find soup kitchens around the country, and visit them, using the $5,000 to outfit them with better equipment to help feed the homeless.

Note that these sort of uses of the money don’t mean that the show can’t make income from product placement. If a company wants to donate something to a charitable cause, by all means give them some screen time! That sort of generosity deserves to be rewarded, and if a company really wants my business, that is the way to convince me to give it to them, not by supporting shallow behavior and wasteful spending. Unfortunately I have little hope that anything will change. Shows like “What Not To Wear” embody a disturbing and sick slice of modern American culture, a slice that is nothing more than a gussied up version of the blue collar obsession with Wal-mart style consumerism. It’s a sickness we need to face as a culture and cure before we let it destroy the values we, as Americans, are supposed to treasure and strive for.

-Angry Midwesterner


In what appears to be continuing series in credit card malfeasance, I would like to preface by saying that it applies to one issuing bank/card marketing company and not necessarily to all such entities. However; card marketing companies are like lemmings — where one goes, they all follow, so I wouldn’t be surprised that what I describe here could be happening elsewhere.

The story starts in the typical manner: an offer letter shows up in your mailbox for a credit card. It may have a low teaser rate or may be an affinity card with your favorite sports symbol on it (“The Chief”). You decide that you will send it in. It says your rate may be “as low as” 3%. “As low as” means that if you pay all your bills in gold boullion, pay them before they are due, and add on every enhancement offered, you get the 3%, otherwise you pay the 24% like everyone else. What happens is that to generate a marketing list, card marketers go out to the credit bureaus with a set of criteria (say FICOs between 650 and 680) and get a list of names and addresses—the “pre-pull”. They make the offer and for those who return the business reply envelope, they do a post-pull and then give you the rate that the credit risk model says you deserve, taking into account allowances for things like the current interest rate margin (profit).

Now typically, (here is the cross-sell again), these offers for a credit card come packaged with a lot of enhancements like a) lost and stolen card protection, b) travel rewards, c) extended warranties, or d) discounts. These may be via opt-in/out boxes or actually packaged together. So when the application is sent in, you may be signing up for “enhancement products” on the card if you don’t read VERY carefully.

A recent trend I’ve noticed is for credit cards to be offered at a checkout counter. Now this is actually a good marketing strategy — using your existing relationships with a customer. This shift is occurring as marketing professionals scour for new ways to reach you. Five years ago, the direct mail response rate was 1.3%. The last time I looked it was .04%. Since it costs postage, printing, processing charges, etc. to send an offer, the CPA or cost per booked account is is getting larger and larger. If you are at a checkout counter at a store and the clerk says something like “Do you know you can get a 10% discount if you use The “Store Branded” Master Card —would you like one?” — well, that is pretty enticing.

So you apply for the credit card. This usually takes the form of a “take-one” application in industry parlance. In the particular case in mind, you fill out the application form, including your SSN, and hand it to the checkout or customer service person who enters the data into “The Program”. The application sails away to the issuing bank, who owns The Program, and they run the post-pull and model and presto, you have a credit card, often within minutes. The stores even have a card-not-present payment option to allow you to use it right away. The CPA for this type of offer is much lower than shotgunning direct mail out to the general population, which happens to own an average of five credit cards anyway. And even with the 10% discount giveaway added, the CPA is less than traditional direct mail marketing methods.

What about those enhancement products? On the form I obtained, in order to sign-up for an enhancement, you have to either sign a blank that says you want the product, or sign that you decline the product. This set of required signatures is, however, on another panel of the application tri-fold. I asked what happens if you ignore the blanks and turn in the application without signing either accept or decline? “The Program” won’t accept the application without one or another. [Note the positive reinforcement of the cross-sell opportunity rather than default to a no-sell.]

This, I presume, is meant to be a closed loop control but the customer service people are always busy and are under pressure to complete the application processing as quickly as possible. I asked if they ever just checked a box to get on with it —“No, That would be cheating” was the response. A particular person, of whom I have previously referred to in conjunction with credit cards, applied for a card in this manner, not signing up for the enhancement. She left both signature spaces blank. Strangely, the application, which was returned to her after the data entry procedure, had some handwriting which differed from hers. An accident?

I asked the checkout clerk, a young guy, if they received incentives for pushing credit cards. Yes they did. I asked whether they got cash incentives or the manager-will-beat-you less type. [My daughter , working in a department store as a clerk, was continually subjected to harassment for not meeting her ‘quota’ of store cards. She quit.] He laughed and said more like the second rather than the first.

At this point let me state that this is completely legal. The best marketing builds on existing relationships. The only caveat is that perhaps it’s not that good of an idea to have customer service clerks enter data under pressure and under incentives to meet application quotas. And further; it’s not a good idea to take applications and transfer data to their terminal where the customer really can’t view what is being requested in their name. Card processors do this by optical character recognition at high rates (and with low error rates) and leave out the human component. I also wonder where that application goes, the one with your personal data and SSN on it, after the data is entered into The Program.

That is how instant credit can work. Here is how typical direct mail applications work. The application arrives at card processing entity where the application is scanned, post-pulls are done, analysis run and card is priced (interest rate set). Plastic is generated and shipped to customer with sticky label that says “To activate card, call number 800-613-4395”. So far so good. Now the scam……

Let’s suppose that the customer, in an attack of buyer remorse, upon receiving his plastic decides that he doesn’t need another card, so he just cuts up the card. That is to say, the card is never activated.

20 days later he get a statement with a $29.00 or some such charge against his card. It might be for an extended warranty plan or a card protection plan, but the customer knows that he cut up and never activated the card. He disregards the statement. (Most likely he never opens it because he knows he doesn’t have that card.) After 30 days, the card gets hit with interest (e.g. 24%) plus $29 late fee. Balance is now $58.58. Second month passes — another interest and late fee. Balance is now $88.75. Account is deliquent 60 days, letter is sent. “Why is is this bank bothering me” — into the garbage. Another month, another late fee. Balance now $119.53, and so forth until you get a phone call. “I don’t owe you anything”. Suppose the card holder was sub-prime and they were given a credit line of $500. After a while, the accumulated balance exceeds the credit limit and they get both a late fee and an over-limit fee.

In the particular case I am speaking of, customers had run up balances of $1500 or more having never activated their card. Not to mention royally screwing their credit histories at the bureaus.

A regular merchant could never post a settlement against an unactivated card as this is a principle barrier against merchant fraud. But the issuing bank, who usually also runs either an enhancement business unit, or contracts for one, OWNS the cardholder masterfile. By masking out the activation character position in the master file by means of a COBOL program,they can run the enhancement sales orders against the master file and ‘force post’ the enhancement product sale. The pretense is that this is valid and legal because the customer indicated a desire to purchase the enhancement, even though the product is an enhancement against a non-active account.

Pretty good. Enhancement products can generate the highest profit margins at the bank, and drop right to the bottom line. Now if they could only convince the FTC and the lawyers litigating aginst them in class action suits.

As we reflect this week on the passing of Norman Mailer, I find myself thinking about his contemporary and acquaintance, playwright Arthur Miller, author of the acclaimed “Death of a Salesman.” I can’t help but think that if Miller, who died in 2005, had lived a bit longer, he might have written a new play entitled “Death of a Feline.” Like his previous work it would also have been a multi-layered play about apparently banal and normal events, which somehow take on an almost epic tone as they convey the prejudices, follies, and cruelties of the society they occur in.

We’ve moved from a cold, heartless society which could reflexively and accidentally grind a man into the dust to an overheated, mushy-hearted society which may systematically and deliberately grind a man into the dust for the unforgivable crime of acting like a human being. I can’t help but think that both Mailer and Miller would be all over this one.

Here are the facts, which no one disputes: James M. Stevenson, 54, founder of the Galveston Ornithological Society and famed bird enthusiast, used a .22-caliber rifle to kill, with full pre-meditation and with malice, Mama Cat, a feral cat living under a toll bridge. His reason: Mama Cat preyed upon piping plovers, endangered shorebirds, with the efficiency common to her breed. Mr. Stevenson, believing that the world is better with piping plovers than without, decided to eliminate a serious threat to their continued survival. And he did so.

And so, now Mr. Stevenson is on trial for the crime of animal cruelty, and could spend up to two years in prison and a $10,000 fine if convicted.

In Texas. Where the state regularly executes morons without a qualm. In Texas, Mr. Stevenson faces serious jail time for shooting a cat to defend a bird. Mind you, this isn’t his first cat-killing, as he freely admits to killing numerous cats on his own property for similar crimes against avians.

In other words, he did exactly what human beings have done for at least 10,000 years: he killed an animal he didn’t like in defense of other animals he did like. He did no more, and no less, than what farmers, shepherds, hunters, and pet owners have done from the dawn of civilization. But, sadly for him, he did it in a civilization that no longer accepts such acts—even in its most individualistic and firearms-friendly area.

Now, it’d be one thing if Mr. Stevenson had killed a beloved pet which was simply wandering around on its own property. But, as far as he knew, he was killing a feral cat which preyed upon an endangered species. A cat which probably would have been put to death (humanely) in a shelter if it had been picked up by the very state which now tries Mr. Stevenson. The very state which extended the protection of law to the birds the cat sought to kill.

If a human had dared to do what Mama Cat did each and every day, he would have found himself prosecuted to the full extent of the law, facing probably even more jail time than Mr. Stevenson is now. Texas law and society would recognize that bird-killer as a menace whose willingness to finish off the piping plover justified their depriving him of liberty and, if he resisted arrest or attempted flight from prison, even his life.

Society reserves to itself the right to mete out justice to human beings, and rightly so. Rule of law and civilized society demand that I not be free to pursue my private vendetta against you. But Texas now seeks to extend that principle much further. Under its new animal cruelty laws, it would seem that the state now reserves to itself the right to defend animals, no longer allowing human beings to intervene freely in nature’s struggle.

So another human freedom, enshrined since the Dawn of Man, falls. And for what? To protect our ridiculously emotional and anthropocentric view of animal life. I own a cat, love it very much, and can understand just how painful it would be for my cat to be killed by another human being. But, as much as I love my cat, it is just a cat, and infinitely less valuable than any human person. If someone cruelly and needlessly shot down my cat, I would be angry, and seek justice. But if I, through my own carelessness, let my cat threaten endangered animals or the valuable property of another, shouldn’t those I’ve wronged be able to defend life or property against my cat?

Should my emotional attachment to my cat, or cats in general, be allowed to curtail the freedom of another to defend either their property or other species they value more than my cat? Once my cat leaves my property, aren’t my wishes secondary?

The Texas case has turned into a shouting match between cat-fanciers and bird-lovers. But there’s a much more important principle at stake: should the emotion of either side be allowed to dominate logic and reason? If a beloved cat is killed, it’s a tragedy, but it’s not a crime on par with murder, simple battery, or even assault.

It should not be treated as such.